Why You Need to Start Investing in Legos

What are some of the best ways to invest your money? Blue chip stocks? Absolutely. Real estate? Sure thing.

But you might also be better off shaking down your niece or nephew for their favorite Lego sets. That’s the finding of a new study published in the Social Science Research Network by economists at Russia’s Higher School of Economics.

Researchers Victoria Dobrynskaya and Yulia Kishilova looked into the prices for sets of the world-famous bumpy bricks collected on the secondary market between 1987 and 2015. They found the toys delivered better returns than large stocks, bonds, gold, and other alternative investments. The study focused on unopened sets to allow for an accurate comparison to the primary market prices.

What Kind of Return Are We Talking Here?

Let’s face it, Lego can be fairly expensive when you buy it from the store to begin with. But what makes its value skyrocket on the secondary market?

“Lego is an iconic toy with diminishing over time supply and a high collectible value,” the researchers wrote in an abstract for their study. “A huge secondary market for Lego sets with tens of thousands of transactions per day has developed since the turn of the century.”

Dobrynskaya and Kishilova’s research showed that the resale on unopened sets delivered an average return of 11 percent each year. But not all Legos are built equally: Depending on the size of the set and the series it belongs to, it could reach an astonishing return of up to 600 percent per year.

Standout Size or Series?

So which Legos should you be on the lookout to buy, or, if you’re so inclined, uncover from your old toy boxes in your parents’ basement? It’s not a simple case of the bigger the better.

The most profitable sets consist of up to 350 pieces, with their average profit exceeding a 22 percent return each year. Next, come the behemoths, the sets with 1,200 to 6,000 pieces. Those sets yield a 12 percent return on average. And lastly, the mid-sized sets deliver a relatively meager return of 6.8 to 10 percent.

That being said, it’s the series that seem to really make a difference (and are probably responsible for kicking off this investor exuberance). Perhaps it’s no surprise that over the course of the study, the most profitable sets came from the Lego Ideas series, where the kits are based on user submissions for Lego products. Lego Ideas series products released between 2010 and 2014 were resold for an average return of 64 percent. Next up were the Lego Seasonal sets, released between 2006 and 2014, with an average return of 58 percent, followed by Lego Super Heroes, released between 2011 and 2014, with a 51 percent return.

Top Earners

Want to know where the big money is made? Or the big gains, at least. Well, if you have one of the below floating around your home unopened, Christmas might come early this year. Interestingly, all three were released in 2014:

The Darth Revan set from the “Star Wars” series: annual return of 613 percent

The Elves’ Workshop set from the Seasonal series: annual return of 590 percent

The Seal’s Little Rock set from the Friends series: annual return of 527 percent

Other Reasons to Invest

While profit margins like this make Lego more collectible than art, precious stones, and metals, the toys have also proven to be remarkably resilient against financial market volatility and economic downturns. Just like gold, then, but lighter.

In short, get collecting. Just steer clear of “The Simpsons,” because according to the study, the 2014 Lego sets based on the animated television series actually lost collectors an average of 3.5 percent on resale. And don’t open the packaging!